U.S. sugar reform bill proposed in both houses

Friday, February 15, 2013

A bipartisan group of U.S. legislators proposed bills in both the House and Senate to reform the Depression-era sugar program, including rolling back provisions in the 2008 Farm Bill that protect U.S. sugar growers.
Sugar users, spearheaded primarily by the Sweetener Users Association (SUA), the Coalition for Sugar Reform and the National Confectioners Association (NCA), have been pushing for Congress to enact more trade-friendly regulations regarding sugar, including raising import quotas from global sugar producers with surpluses. The United States consumes more sugar than it produces but still limits the amount it imports from various sugar-producing nations to protect domestic producers.
Those lobbying groups argue U.S. growers, protected against competition from foreign producers (most notably Australia), are not incented to increase refining capacity, which impacts sugar users and ultimately consumer food prices.
“We’d like to be able to buy sugar for what the rest of the world is able to buy sugar for – it’s as simple as that,” said Eddie Opler, chairman and chief executive officer of the confectionary company World’s Finest Chocolate.
The Sugar Reform Act has been backed by Sens. Jeanne Shaheen, D-N.H.; Mark Kirk, R-Ill.; Pat Toomey, R-Pa.; Dick Durbin, D-Ill.; Rob Portman, R-Ohio; Frank Lautenberg, D-N.J.; Dianne Feinstein, D-Calif.; Bob Corker, R-Tenn.; Kelly Ayotte, R-N.H.; and Lamar Alexander, R-Tenn.; and Reps. Joe Pitts, R-Pa.; Danny Davis, D-Ill.; Earl Blumenauer, D-Ore.; and Bob Goodlatte, R-Va.
“These reform bills would help to modernize one of the most outdated federal programs still in operation, which has driven up the price of U.S. refined sugar — currently about 30 percent higher than on the world market — and continues to create unnecessary instability in the market, stifling American economic growth and job creation,” said Larry Graham, chairman of the Coalition for Sugar Reform and NCA president.
The legislation introduced in both chambers Thursday calls for the repeal of trade restrictions preventing the Secretary of Agriculture from allowing additional sugar imports when needed and the Feedstock Flexibility Program, which requires the government to buy surplus sugar and sell it to ethanol companies at a loss.
Additionally, the bills call for reform of domestic supply restrictions, granting the Secretary of Agriculture the authority to modify or suspend domestic marketing allotments, and providing more flexibility for USDA in administering the import quota system.
“Outdated sugar policy not only stifles U.S. economic growth and job creation, but is one of the oldest and most protectionist programs mandated by Congress,” said National Foreign Trade Council President Bill Reinsch in a statement. “The bills introduced today propose modest reforms.”
The American Sugar Alliance, which represents domestic growers, has argued the protections allow growers to manage rising input costs and subsidized sugar from other markets, at no cost to taxpayers. Opponents suggest the cost to taxpayers comes in the form of higher costs for consumers.
“Our biggest obstacle to growing is the fact that we have to pay so much more for sugar than our competitors who are stationed right across the border in Canada,” says George Stege, president of Ford Gum & Machine Co., Inc. “How do you compete when your most abundant product is 46 percent more in cost? It’s no wonder that our competitors have gone to Canada.”American Shipper reported in October about how the sugar debate might impact ongoing Trans-Pacific Partnership negotiations. - Eric Johnson